Quipt Home Medical Corp. (the “
Company”)
(NASDAQ:QIPT; TSXV:QIPT), a U.S. based leader in the home medical
equipment industry, focused on end-to-end respiratory care, today
announced its first quarter fiscal 2022 financial results and
operational highlights. These results pertain to the three-month
period ended December 31, 2021 and are reported in U.S. Dollars.
Financial
Highlights:
- Revenue for Q1 2022 was $29.5
million compared to $22.8 million for Q1 2021, representing a 30%
increase in revenue year-over-year.
- As of December 31, 2021, the
Company’s backlog increased to approximately 8,000 patients in the
queue to be set up on sleep devices, compared to a more typical
1,000 patients historically. The Company is cautiously optimistic
that sleep device allocations will increase in the second half of
2022, which will relieve some of the backlog, generating a lift in
revenue from this impacted segment of the business.
- The sleep segment revenue impact
was approximately $1 to $1.5 million in Q1 2022.
- Recurring Revenue as of Q1 2022 was
77% of total revenue.
- Adjusted EBITDA for Q1 2022 was $6
million (20.3% margin), compared to Adjusted EBITDA for Q1 2021 of
$5.2 million, representing a 16% increase year-over-year.
- Cash flow from continuing
operations was $5.3 million in Q1 2022 compared to $2.8 million in
Q1 2021, an increase of 90%.
- The Company reported $30.1 million
of cash on hand as at December 31, 2021, compared to $23.6 million
as at December 31, 2020.
- The Company has an undrawn credit
facility of $20 million as at December 31, 2021.
Operational
Highlights:
- Through the Company’s continued use
of technology and centralized intake processes, respiratory
resupply set-ups and/or deliveries increased to 51,137 for the
three months ended December 31, 2021, compared to 34,996 for the
same period ended December 31, 2020, an increase of 46%.
- The Company’s customer base
increased 45% year over year from 51,836 unique patients served in
Q1 2021 to 75,309 unique patients in Q1 2022.
- Compared to 118,100 unique
set-ups/deliveries in Q1 2022, the Company completed 76,691 unique
set-ups/deliveries in Q1 2021, an increase of 54%.
- The Company continues to experience
robust demand for respiratory equipment, such as Oxygen
Concentrators, Ventilators, as well as the CPAP resupply and other
supplies business.
- The Company operates out of 76
locations in fifteen states across the United States, concentrated
in the Midwest, Southeast and East coast regions, completing in
fiscal 2021 over 350,000 deliveries to more than 170,000 active
patients, with over 19,000 referring physicians.
Acquisition Related
Updates:
- Completed three acquisitions during the three months ended
December 31, 2021.
- On October 1,
2021, the Company acquired a business with operations in
Mississippi adding over 4,000 active patients, more than 10,000
unique orders, and 590 unique referring physicians. Moreover, the
acquisition provides Quipt important insurance contracts and
decades of operating experience, with an over 30-year operating
track record in the markets served. The business has a diverse
payor mix and full suite of products with a focus on respiratory
care, representing over 65% of the mix.
- On November 1,
2021, the Company acquired a business with operations in Central
Illinois. The acquisition has a heavily weighted respiratory
product mix, and over 3,700 active patients. Moreover, the
acquisition provides Quipt important insurance contracts and
decades of operating experience, with an over 40-year operating
track record in the markets served. The business has a diverse
payor mix and full suite of products with a focus on respiratory
care, representing over 85% of the mix.
- On November 9,
2021, the Company acquired a privately held biomedical services
company, with operations in the Southeastern United States. The
acquisition provides the Company a synergistic opportunity to
expand into a brand-new service line of biomedical repair services
for respiratory equipment including preventative maintenance.
Subsequent Events to the Three Months
Ended December 31, 2021:
- On January 1,
2022, the Company acquired At Home Health Equipment, Inc., a
business with operations in Indiana, reporting unaudited trailing
12-month annual revenues of approximately $13 million and $1.6
million in net income with anticipated Adjusted EBITDA of $2.9
million (22% margin) post integration. The acquisition adds over
15,000 active patients.
- Quipt’s
current revenue run-rate (unaudited), including At Home Health
Equipment, Inc., is $135 million.
- On February 3,
2022, the Company announced that Mr. Brian J. Wessel has joined the
Board of Directors of the Company as an Independent Director and
Chair of the Audit Committee. Mr. Wessel is a senior business
executive with over 34 years of global client service, operational
and financial expertise. As a former senior partner at Ernst &
Young, Mr. Wessel provided audit and advisory services to public,
private, and private-equity-owned companies across multiple
industry sectors. Additionally, Mr. Wessel led Ernst & Young’s
Capital Markets practice group in Mexico overseeing various foreign
private issuers listed on the U.S., European and Japanese stock
exchanges. Mr. Wessel has a compelling executive track record of
successfully leading through complex business transactions and
advising companies on accounting, auditing and financial reporting
matters. Mr. Wessel adds significant knowledge and practical
experience in complex accounting and financial reporting matters,
SEC registration statements, business combinations, audits of
internal control over financial reporting and carve-out audits.
Furthermore, Mr. Wessel has deep experience with various types of
transactions including business acquisitions and divestitures.
- The Company is
not hosting a Fiscal Q1, 2022 earnings conference call given the
close proximity to the recent FY21 conference call which included
up to date business commentary held on Tuesday, February 1, 2022.
The Company will resume hosting quarterly earnings conference calls
for Fiscal Q2, 2022 results. However, management anticipates it may
host an investor update call prior to Fiscal Q2, 2022, if
appropriate, given the active nature of the current acquisition
strategy and full acquisition pipeline.
Reiteration of Outlook for Calendar End 2022 (Fiscal
Year Q1 2023):
Based on the current operations (including sleep
device impact), market trends and completed and prospective
acquisitions, the Company is reiterating its outlook for its annual
run-rate revenue by the end of calendar 2022 (Fiscal Q1 2023) to be
$180-$190 million with $38-$43 million in Adjusted EBITDA.
Management
Commentary:
“The continued momentum across the business
shown through our record first quarter results exemplifies our
ability to successfully navigate our operations through a
challenging supply chain environment driving consistent business
performance. Demand continues to remain at robust levels surpassing
historical run-rates for respiratory equipment and services,
evidenced by strength in our oxygen and ventilation therapy service
lines. Inclusive of the sleep device supply constraints we remain
on track for our calendar end 2022 financial outlook and anticipate
a further lift as the sleep device patient backlog subsides in the
second half of the year,” said CEO and Chairman Greg Crawford.
“Moreover, we continue to operate in an extremely bullish
regulatory environment, providing us the ability to aggressively
approach our acquisition strategy with the goal of being a leader
in clinical respiratory care throughout the United States. Our
acquisition pipeline is exciting with a plethora of strategic
opportunities ranging in size, and we look forward to moving
targets through the funnel in the coming months. With the
unparalleled scalable platform we have, driven by the patient
centric ecosystem we have created, our strategy is allowing us to
grow market share in new and existing markets, and provides us the
ability to make sizeable acquisitions and integrate with great
efficiency drawing meaningful synergies. Coupling this with our
strong financial position, we have never been more excited as to
what we can accomplish as a company and look forward to continuing
to deliver record financial results.”
Chief Financial Officer Hardik Mehta added, “We
are pleased to see our revenue run-rate near $120 million as of the
end of our fiscal first quarter, as well as seeing a solid lift in
our Adjusted EBITDA margin, returning to over 20% as we continue
through the integration process of our recent acquisitions. The
robust performance was driven through strong demand leading to
larger volumes, higher cash collections and continuing to support
the business with lower operating costs. The infrastructure we have
in place today allows us to position ourselves as a market leader
and gives us the flexibility to add locations organically to the
platform, as well as efficiently integrate acquired assets. On the
acquisition front, we have never been more excited with the targets
we have in our pipeline. We are also looking at potential
expansionary opportunities into synergistic verticals of service
that would enhance our end-to-end product and service
offering.”
The financial statements of the Company for the
three months ended December 31, 2021 and 2020 and accompanying
Management Discussion & Analysis (MD&A) are available
at www.sedar.com.
ABOUT QUIPT HOME MEDICAL CORP.
The Company provides in-home monitoring and
disease management services focused on end-to-end respiratory
solutions for patients in the United States healthcare market. It
seeks to continue to expand its offerings to include the management
of several chronic disease states focusing on patients with heart
or pulmonary disease, sleep disorders, reduced mobility and other
chronic health conditions. The primary business objective of the
Company is to create shareholder value by offering a broader range
of services to patients in need of in-home monitoring and chronic
disease management. The Company’s organic growth strategy is to
increase annual revenue per patient by offering multiple services
to the same patient, consolidating the patient’s services and
making life easier for the patient.
Reader Advisories
Readers are cautioned that the financial
information regarding recent acquisitions disclosed herein is
unaudited and derived as a result of the Company’s due diligence,
including a review of the acquisition’s bank statements and tax
returns.
There can be no assurance that any of the
potential acquisitions in the Company’s pipeline or in negotiations
will be completed as proposed or at all and no definitive
agreements have been executed. Completion of any transaction will
be subject to applicable director, shareholder and regulatory
approvals.
Unless otherwise specified, all dollar amounts
in this press release are expressed in U.S. dollars.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
Forward-Looking Statements
Certain statements contained in this press
release constitute "forward-looking information" as such term is
defined in applicable Canadian securities legislation. The words
"may", "would", "could", "should", "potential", "will", "seek",
"intend", "plan", "anticipate", "believe", "estimate", "expect" and
similar expressions as they relate to the Company, including: sleep
device allocations increasing in the second half of 2022, which
will relieve some of the backlog, generating a lift in revenue from
this impacted segment of the business; anticipated Adjusted EBITDA
of acquisitions post integration; the Company’s outlook for
calendar 2022; and the Company hosting an investor update call
prior to Fiscal Q2, 2022; are intended to identify forward-looking
information. All statements other than statements of historical
fact may be forward-looking information. Such statements reflect
the Company's current views and intentions with respect to future
events, and current information available to the Company, and are
subject to certain risks, uncertainties and assumptions, including,
without limitation: the Company’s ability to maintain/slightly
increase its collections ratios; the Company maintaining its gross
margins and maintaining its revenue growth; the Company maintaining
its selling, general and administrative expenses; acquisitions
achieving results at least as good as historical performances; the
financial information regarding acquisitions being verified when
included in the Company’s consolidated financial statements
prepared in accordance with generally accepted accounting
principles in Canada as set out in the CPA Canada Handbook -
Accounting under Part I, which incorporates International
Financial Reporting Standards as issued by the International
Accounting Standards Board; the Company successfully identified,
negotiating and completing additional acquisitions, including
accretive acquisitions; and the Company organically growing at a
rate of 10% and completing acquisitions that add at least $32
million in new revenue in order to meet 2022 outlook. Many factors
could cause the actual results, performance or achievements that
may be expressed or implied by such forward-looking information to
vary from those described herein should one or more of these risks
or uncertainties materialize. Examples of such risk factors
include, without limitation: credit; market (including equity,
commodity, foreign exchange and interest rate); liquidity;
operational (including technology and infrastructure);
reputational; insurance; strategic; regulatory; legal;
environmental; capital adequacy; the general business and economic
conditions in the regions in which the Company operates; the
ability of the Company to execute on key priorities, including the
successful completion of acquisitions, business retention, and
strategic plans and to attract, develop and retain key executives;
difficulty integrating newly acquired businesses; the ability to
implement business strategies and pursue business opportunities;
low profit market segments; disruptions in or attacks (including
cyber-attacks) on the Company's information technology, internet,
network access or other voice or data communications systems or
services; the evolution of various types of fraud or other criminal
behavior to which the Company is exposed; the failure of third
parties to comply with their obligations to the Company or its
affiliates; the impact of new and changes to, or application of,
current laws and regulations; decline of reimbursement rates;
dependence on few payors; possible new drug discoveries; a novel
business model; dependence on key suppliers; granting of permits
and licenses in a highly regulated business; the overall difficult
litigation environment, including in the U.S.; increased
competition; changes in foreign currency rates; increased funding
costs and market volatility due to market illiquidity and
competition for funding; the availability of funds and resources to
pursue operations; critical accounting estimates and changes to
accounting standards, policies, and methods used by the Company;
and the occurrence of natural and unnatural catastrophic events and
claims resulting from such events; as well as those risk factors
discussed or referred to in the Company’s disclosure documents
filed with the securities regulatory authorities in certain
provinces of Canada and available at www.sedar.com. Should any
factor affect the Company in an unexpected manner, or should
assumptions underlying the forward-looking information prove
incorrect, the actual results or events may differ materially from
the results or events predicted. Any such forward-looking
information is expressly qualified in its entirety by this
cautionary statement. Moreover, the Company does not assume
responsibility for the accuracy or completeness of such
forward-looking information. The forward-looking information
included in this press release is made as of the date of this press
release and the Company undertakes no obligation to publicly update
or revise any forward-looking information, other than as required
by applicable law.
Non-GAAP Measures
This press release refers to “Adjusted EBITDA”
which is a non-GAAP and non-IFRS financial measure that does not
have a standardized meaning prescribed by GAAP or IFRS. The
Company’s presentation of this financial measure may not be
comparable to similarly titled measures used by other companies.
This financial measure is intended to provide additional
information to investors concerning the Company’s performance.
Adjusted EBITDA is defined as EBITDA excluding stock-based
compensation. Adjusted EBITDA is a Non-IFRS measure the Company
uses as an indicator of financial health and excludes several items
which may be useful in the consideration of the financial condition
of the Company, including interest expense, income taxes,
depreciation, amortization, stock-based compensation, goodwill
impairment and change in fair value of debentures and financial
derivatives. The following table shows our Non-IFRS measure
(Adjusted EBITDA) reconciled to our net income for the indicated
periods:
|
|
|
|
|
|
|
|
|
|
Three |
|
Three |
|
|
|
months |
|
months |
|
|
|
ended December |
|
ended December |
|
|
|
31, 2021 |
|
31, 2020 |
|
Net income (loss) |
|
$ |
(2,131 |
) |
|
$ |
1,366 |
|
|
Add back: |
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
5,013 |
|
|
|
3,681 |
|
|
Interest expense, net |
|
|
501 |
|
|
|
486 |
|
|
Provision (benefit) for income
taxes |
|
|
148 |
|
|
|
(1,407 |
) |
|
EBITDA |
|
|
3,531 |
|
|
|
4,126 |
|
|
Stock-based compensation |
|
|
2,110 |
|
|
|
15 |
|
|
Acquisition-related costs |
|
|
62 |
|
|
|
56 |
|
|
Gain (loss) on foreign
currency transactions |
|
|
41 |
|
|
|
2 |
|
|
Change in fair value of
debentures and warrants |
|
|
261 |
|
|
|
983 |
|
|
Adjusted EBITDA |
|
$ |
6,005 |
|
|
$ |
5,182 |
|
|
Management uses this non- IFRS measure as a key
metric in the evaluation of the Company’s performance and the
consolidated financial results. The Company believes this non- IFRS
measure is useful to investors in their assessment of the operating
performance and the valuation of the Company. In addition, this
non- IFRS measure addresses questions the Company routinely
receives from analysts and investors and, in order to assure that
all investors have access to similar data, the Company has
determined that it is appropriate to make this data available to
all investors. However, non- IFRS financial measures are not
prepared in accordance with IFRS, and the information is not
necessarily comparable to other companies and should be considered
as a supplement to, not a substitute for, or superior to, the
corresponding measures calculated in accordance with IFRS.
For further information please visit our website
at www.Quipthomemedical.com, or contact:
Cole StevensVP of Corporate DevelopmentQuipt Home Medical
Corp.859-300-6455cole.stevens@myquipt.com
Gregory CrawfordChief Executive OfficerQuipt Home Medical
Corp.859-300-6455investorinfo@myquipt.com
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